Taxation of perquisites under the modified structure introduced in the budget will be effective from April 1, 2001, and not from the date of issue of final guidelines on their valuation.
Similarly, tax liability under the new transfer pricing legislation will also be effective from April 1 this year. However, procedural requirements such as documentation, etc, will be effective from the date of issue of final guidelines on transfer pricing rules which, sources said, will be issued tomorrow.
A senior finance ministry official told Business Standard that tax liability on perquisites will be for the entire financial year as the Finance Act, 2001 has made the changes in taxation of perquisites effective from April 1, 2001. The situation is similar in the case of transfer pricing legislation, he added.
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The official said the final guidelines on valuation of perquisites will be issued within a fortnight. The finance ministry has already issued the draft guidelines in this regard.
Sources said the revenue department had discussed the possibility of imposing the tax liability in case of perquisites from the date of issue of final guidelines on their valuation apprehending litigations if it came into effect from April 1, 2001.
However, it has been decided to stick to the provisions of the Finance Act, they added.
The Finance Act, 2001 has revised the limit of taxing perquisites in the case of employees where the monetary payment of salary is in excess of Rs 50,000.
To avoid ambiguity, it envisaged that details of perquisites would be fixed in a manner prescribed in the Income-Tax Rules. An obligation is cast on the person responsible for paying income under the head